Contracts

Association Contracts

A contract is an agreement between two parties to do or not to do something. Associations generally have two types of contracts, those for association management/maintenance services and those for purchasing goods and services. The management contract is either with an employee of the association or with a management entity.

Contract Requirements for Goods & Services

  • Must be in Writing – Contracts for materials & equipment that cannot be fully performed within 1 year.
  • If contract is 5% of total annual condo budget including reserves – Must obtain competitive bids (unless only source of supply within county).  Don’t have to go with lowest bidder.
  • Bidding Process exemptions – Attorney, accountant, architect, community association manager, engineering, landscape architect services, and association employees.
  • Nothing in the Statutes limit the ability of an association to obtain needed products and services in an emergency.
  • Competitive bids are not required if the association desires to enter into a contract with a business entity which is the only source of supply within the county serving the association.
  • Competitive bids must be kept for one year.
  • All contracts are to be disclosed to the members and approved at board meetings by majority board member vote.

Contract Conflicts of Interest

  1. Association directors and officers, and the relatives of directors and officers, must disclose to the board any activity that may reasonably be construed to be a conflict of interest.
  1. If a director or officer, or a relative of a director or officer, proposes to engage in an activity that is a conflict of interest, the proposed activity must be disclosed to the members, listed on all contracts and transactional documents related to the proposed activity, and must be attached to the board meeting agenda and minutes. Approval of the contract requires an affirmative vote of two-thirds of all other directors present at the meeting.
  1. Upon motion of any member, the contract or transaction shall be brought up for a vote and may be canceled by a majority vote of the members present. If the contract is canceled, the association is only liable for the reasonable value of the goods and services provided up to the time of cancellation and is not liable for any termination fee, liquidated damages, or other form of penalty for such cancellation.
  1. If the board votes against the proposed activity, the director or officer, or the relative of the director or officer, must notify the board in writing of his or her intention not to pursue the proposed activity or to withdraw from office.
  1. A contract between a director or an officer, or a relative of a director or an officer, and the association that has not been properly disclosed as a conflict of interest or potential conflict of interest is voidable and terminates upon the filing of a written notice terminating the contract with the board of directors which contains the consent of at least 20 percent of the voting interests of the association.

Association Property Management Agreements

Agreements for the management and maintenance of association property require special types of contracts. These include:

    • Property Manager Employment Agreement and
    • Property Management Contract.

Detail information regarding these contracts, together with sample contracts, is contained on the "Association Management" page of this website.

Sample Contracts

Standard Construction Contract

Here is a standard construction contract template, developed through negotiations with contractors, which clarifies deliverables and helps assure coverage of important terms and conditions. This, together with the standard contract addendum shown below, protects the association's interests. Standard Contract Template

Standard Construction Contract Addendum

Here is a standard Ward Damon attorney-prepared vendor contract addendum for attachment to all association-negotiated contracts: Standard Contract Addendum

Contractor Agreement

Here is a "Contractor Agreement" obtained from Gray Systems Incorporated. Before using this contract, it should be reviewed by competent legal counsel: Contractor Agreement

Contracts for Communication Services

  1. If provided in the declaration, the cost of communications services including information services or Internet services obtained pursuant to a bulk contract is common expense. If the declaration does not provide for the cost of such services as a common expense, the board may enter into such a contract, and the cost of the service will be a common expense.
  1. The cost for the services under a bulk rate contract may be allocated on a per-unit basis rather than a percentage basis if the declaration provides for other than an equal sharing of common expenses.
  1. The contract must be for at least 2 years.
  1. Any communication contract made by the board may be canceled by a majority of the voting interests present at the next regular or special meeting of the association. Any member may make a motion to cancel the contract, but if no motion is made or if such motion fails to obtain the required majority at the next regular or special meeting, whichever occurs first, such contract shall be deemed ratified.
  1. Such contract must provide, and is deemed to provide if not expressly set forth, that any hearing-impaired or legally blind unit owner who does not occupy the unit with a non-hearing-impaired or sighted person, or any unit owner receiving supplemental security income under Title XVI of the Social Security Act or food assistance as administered by the Department of Children and Families pursuant to s. 414.31, may discontinue the cable or video service without incurring disconnect fees, penalties, or subsequent service charges, and, as to such units, the owners are not required to pay any common expenses charge related to such service.
  1. If fewer than all members of an association share the expenses of cable or video service, the expense shall be shared equally by all participating unit owners.
  1. The association may use the provisions of s. 718.116 to enforce payment of the shares of such costs by the unit owners receiving cable or video service.